2017 Investment Priorities Plan

A Presentation
Legal Basis THE PLAN
 Sec. 26, Omnibus Investment Code of 1987 (E.O. 226)

“xxx over-all plan prepared by Board xxx which

contains:
(a) Specific activities and generic
categories of economic activity xxx;
(b) Specific public utilities xxx;
(c) Specific activities where the potential
for utilization of indigenous no-petroleum based fuels
or sources of energy can be best promoted; and
(d) Such other information, analyzes, data,
guidelines or criteria as the Board may deem
appropriate.”
Legal Basis THE PLAN (Continued)
 Sec. 29, Omnibus Investment Code of 1987
(E.O. 226)

“[T]he President through the

recommendation of the Board of
Investors (BoI) shall – “proclaim the
whole or part of such plan as in effect; or
alternatively, return the whole or part of
the plan to the Board of Investment for
revision.”
Legal Basis Criteria
 Sec. 28, Omnibus Investment Code of 1987
(E.O. 226)

In part states that -- "No economic

activity shall be included in the Investment
Priority Plan unless it is shown to be
economically, technically and
financially sound after thorough
investigation and analysis by the Board."
Plan 2014

The last IPP was the 2014 IPP

◦ a 132 page IPP, a lengthy one compared to the
2017 IPP which consist only of 8 pages
IPP; Defined
IPP is "the country’s basic policy
document that enumerated the areas or
sectors of the economy that were
deemed priorities of the state for
investments and development.
Government agencies and the private
sector referred to the IPP when making
investment decisions as well as
promotional activities. (2014 IPP)”
Preferred Activities 2017 IPP
1. All qualified manufacturing activities including agro-
processing;
2. Agriculture, fishery and forestry;
3. Strategic services;
4. Health care services including drug rehabilitation centers;
5. Mass housing;
6. Infrastructure and logistics including local government unit
public-private partnerships (LGU-PPPs);
7. Innovation drivers;
8. Inclusive business models;
9. Environment or climate change-related projects; and
10. Energy.
Preferred Activities 2017 IPP
All qualified manufacturing activities including
agro-processing

(a) Industrial goods; and

(b) Processing of –
(i) Agriculture products
(ii) Fishery products
into –
(i)semi-finished/intermediate goods; or
(ii) finished products or consumer goods
Preferred Activities 2017 IPP
All qualified manufacturing activities
including agro-processing

it also includes:
(a) modular housing components
(b) machinery and equipment
Preferred Activities 2017 IPP
Agriculture, fishery and forestry

It involves commercial production.

(a) seeds and seedlings;
(b) establishment of nurseries and
hatcheries; and
(c) support services and infrastructure
Preferred Activities 2017 IPP
Agriculture, fishery and forestry

It involves commercial production.

xxx
(c) support services and infrastructure,
such as
(i) facilities for drying, cold chain
storage
(ii) harvesting, plowing, spraying
Preferred Activities 2017 IPP
Strategic services
(a) IC Design
(b) Creative Industries/Knowledge-Based
Services
(c) Maintenance, Repair and Overhaul of
Aircraft
(d) Charging/Refueling Stations for Alternative
Energy Vehicles
(e) Industrial Waster Treatment
(f) Telecommunications
(g) State-of-the-art Engineering, Procurement,
and Construction
Preferred Activities 2017 IPP
Health care services including drug
rehabilitation centers

Mass housing

Infrastructure and logistics including local

government unit public-private
partnerships (LGU-PPPs)
Preferred Activities 2017 IPP
Innovation drivers
research & development (R&D)
activities; conduct of clinical trials
(including drug trials); establishment of
Centers of Excellence; business
incubation hubs; fabrication laboratories;
commercialization of new and emerging
technologies and products of the
Department of Science and Technology
or government-funded R&D;
Preferred Activities 2017 IPP
Inclusive business models
covers business activities of medium and
large enterprises in the agribusiness
and tourism sectors that provide
business opportunities to MSMEs as part
of their value chains. These projects may
qualify for pioneer status;
Preferred Activities 2017 IPP
Environment or climate change-related
projects

Energy
covers power generation projects
utilizing conventional fuels, waste heat
and other wastes and establishment of
battery energy storage systems.
Export Activities 2017 IPP
1. Production and Manufacture of Export
Products
2. Service Exports
3. Activities in Support of Exporters
Export Activities 2017 IPP
Production and Manufacture of Export
Products

This covers the production/manufacture of

export products

Service Exports

This covers export service activities rendered

to clients abroad and paid for in foreign
currency
Export Activities 2017 IPP
Activities in Support of Exporters
This covers activities directly supporting
export producers as follows:
◦ Manufacture of parts/components and
materials and supplies needed in the
production of the export product;
◦ Product testing and inspection;
◦ Repair and maintenance; and
◦ Logistics services
Special Laws 2017 IPP
1. Industrial Tree Plantation (P.D. No. 705)
2. Exploration, Mining. Quarying and Processing of
Minerals (R.A. NO. 7942) (limited to capital
equipment incentives )
3. Publication or Printing of Books/Textbooks (R.A.
No. 8047)
4. Refining, Storage, Marketing, and Distribution of
Petroleum Products (R.A. No. 8479)
5. Rehabilitation, Self-Development and Self-Reliance
of Persons with Disability (R.A. No. 7277)
6. Renewable Energy (R.A. No. 9513)
7. Tourism (R.A. No. 9593)
Special Laws 2017 IPP
Industrial Tree Plantation (P.D. No. 705)
This covers extensive plantation of timber,
non-timber species and fruit trees for
commercial and industrial purposes.
◦ Incentives (Sec. 36)
 Payment of a nominal filing fee of fifty
centavos (P0.50) per hectare;
 No rental shall be collected during the first five (5) years
from the date of the lease; from the sixth year to the
tenth year, the annual rental shall be fifty centavos
(P0.50) per hectare; and thereafter, the annual rental
shall be one peso (P1.00) per hectare
 The lessee shall pay forest charges on the timber
and other forest products grown and cut or
gathered in an industrial tree plantation or tree
farm equivalent to six percent (6%) current market
value thereof;
 Sale at cost of seedlings and free technical advice
and assistance to persons who will develop their
privately-owned lands into industrial tree plantation
or tree farm;
 Exemption from the payment of the percentage tax
when the timber and forest products are sold,
bartered or exchanged by the lessee whether in
their original state or not;
Special Laws 2017 IPP
 The Board of Investments shall classify industrial tree
plantations and tree farms as pioneer areas of
investment under its annual priority plan. A lessee of an
industrial tree plantation or tree farm may either apply
to the Board of Investments for the tax and other
benefits thereunder, or avail of the following benefits:
 Expenses incurred by lessee for the development and
operation of an industrial tree plantation or tree farm prior to
the time when the production state is reached, may be
regarded as ordinary and necessary business expenses or as
capital expenditures
 Deduction from an investor's taxable income for the year, of an
annual investment allowance equivalent to thirty-three and
one-third per cent (33-1/3%) of his actual investment during
the year in an enterprise engaged in industrial tree plantation
or tree farm
 The boundaries of an area covered by an industrial
tree plantation or tree farm lease, once established
on the ground, shall not be altered or modified; and
 A lessee shall not be subject to any obligation
prescribed in, or arising out of, the provisions of the
National Internal Revenue Code on withholding of
tax at source upon interests paid on borrowings
incurred for development and operation of the
industrial tree plantation or tree farm.
Special Laws 2017 IPP
◦ Qualifications
 Financial resources and technical capability not only
to minimize utilization, but also to practice forest
protection, conservation and development
measures to insure the perpetuation of said forest
in productive condition. (Sec. 60)
Special Laws 2017 IPP
Exploration, Mining. Quarying and Processing
of Minerals (R.A. NO. 7942) (limited to
capital equipment incentives )
This covers the exploration and development
of mineral resources, mining/quarrying and
processing of metallic and non-metallic
minerals.
◦ Incentives
 Incentives for Pollution Control Devices
 Income Tax-Carry Forward of Losses
 Income Tax-Accelerated Depreciation
Special Laws 2017 IPP
 Investment Guarantees
 Repatriation of investments – The right to
repatriate the entire proceeds of the liquidation
of the foreign investment in the currency in which
the investment was originally made and at the
exchange rate prevailing at the time of
repatriation.
 Remittance of earnings - The right to remit
earnings from the investment in the currency in
which the foreign investment was originally made
and at the exchange rate prevailing at the time of
remittance.
 Foreign loans and contracts – The right to remit at the
exchange rate prevailing at the time of remittance
such sums as may be necessary to meet the payments
of interest and principal on foreign loans and foreign
obligations arising from financial or technical assistance
contracts.
 Freedom from expropriation - The right to be free
from expropriation by the Government of the
property represented by investments or loans, or of
the property of the enterprise except for public use
or in the interest of national welfare or defense and
upon payment of just compensation. In such cases,
foreign investors or enterprises shall have the right to
remit sums received as compensation for the
expropriated property in the currency in which the
investment was originally made and at the exchange
rate prevailing at the time of remittance.
 Requisition of investment - The right to be free from
requisition of the property represented by the investment
or of the property of the enterprises except in case of war
or national emergency and only for the duration thereof.
Just compensation shall be determined and paid either at
the time or immediately after cessation of the state of war
or national emergency. Payments received as compensation
for the requisitioned property may be remitted in the
currency in which the investments were originally made and
at the exchange rate prevailing at the time of remittance.
 Confidentiality - Any confidential information supplied by
the contractor pursuant to this Act and its implementing
rules and regulations shall be treated as such by the
Department and the Government, and during the term of
the project to which it relates.
Special Laws 2017 IPP
◦ Qualifications
 Filipino citizen
 Capacity to contract
 Corporation, partnership, association, or
cooperative organized or authorized for the
purpose of engaging in mining at least sixty per
centum (60%) of the capital of which is owned by
citizens of the Philippines
 Technical and financial capability to undertake
mineral resources development
Special Laws 2017 IPP
Publication or Printing of Books/Textbooks
(R.A. No. 8047)
This covers content development intended for
books and publication of books in print or in
digital format.
◦ Incentives
 Fiscal and non-fiscal incentives as provided for
under Executive Order No. 226 as amended by R.A. No.
7918
 Exemption from the coverage of the expanded value
added tax law of books, magazines, periodicals,
newspapers, including book publishing and printing, as
well as its distribution and circulation
Special Laws 2017 IPP
Refining, Storage, Marketing, and Distribution
of Petroleum Products (R.A. No. 8479)
This covers refining, storage, marketing, and
distribution of petroleum products.
For gasoline retailing stations, the applicant
shall be required to invest at least Php 10
million per station.
◦ Incentives
 Income tax holiday
 Additional deduction for labor expenses
 Minimum tax and duty of 3% and VAT on imported
capital investment
  Tax credit on domestic capital equipment
 Exemption from contractor’s tax
 Unrestricted use of consigned equipment
 Exemption from taxes and duties on imported
equipment and machines
 Exemption from taxes and duties on imported
spare parts
 Such other applicable incentives under Article 39 of
Executive Order No. 226.
◦ Qualifications
 Persons with new investments for a period of five
(5) years from registration with the BOI
Special Laws 2017 IPP
Rehabilitation, Self-Development and Self-
Reliance of Persons with Disability (R.A. No.
7277)
This covers the manufacture of technical aids
and appliances for the use and/or
rehabilitation of persons with disability, and
the establishment of special schools, day care
centers, homes, residential communities or
retirement villages solely to suit the needs
and requirements of persons with disability.
Special Laws 2017 IPP
Renewable Energy (R.A. No. 9513)
This covers developers of renewable
energy facilities and manufacturers,
fabricators and suppliers of locally-
produced renewable energy equipment
and components.
◦ Incentives
 Income tax holiday – first 7 years
 Additional investments are entitled to additional tax
exemption on the income attributable to the investment
 Duty-free importation of renewable energy
machinery within the first 10 years
 Special realty tax rates on equipment and
machinery – taxes on equipment and improvements
shall not exceed 1.5% of original cost less
accumulated normal depreciation
 Net operating loss carry over
 Corporate Tax Rate – 10% on net taxable income
after 7 year tax holiday
 Accelerated depreciation
 Zero percent VAT rate on the sale of fuel or power
generated from renewable energy sources
 Cash incentive of renewable energy developers for
missionary electrification
 Tax exemption of carbon credits – proceeds from
sale of carbon emission credits are exempt from all
taxes
 Tax credit of domestic capital equipment and
services
Special Laws 2017 IPP
Tourism (R.A. No. 9593)
This covers tourism enterprises that are
outside the tourism enterprise zones
(TEZs) and are engaged in the following:
◦ Tourist transport services;
◦ Establishment and operation of the following:
 Accommodation Establishments;
 Convention and exhibition facilities;
 Amusement parks;
  Adventure and eco-tourism facilities;
 Sports facilities and recreational centers;
 Theme parks;
 Health and wellness facilities;
 Farm tourism; and
 Tourism training centers and institutes.
◦ Development of retirement Villages;
◦ Restoration/preservation and operation of
historical shrines, landmarks and structures
Special Laws 2017 IPP
◦ Incentives
 Economic incentives under existing laws such as
Omnibus Investments Code, Foreign Investments Act,
the Special Economic Zone Act, etc.
 Income tax holiday for up to 6 years for any significant
expansion, renovation or upgrade in its facilities in
relation to the original amount of the investment
 Import capital equipment free of taxes and duties when
necessary for such expansion, renovation or upgrade
 All incentives under the Omnibus Investments Code
 Incentives offered under this act shall be without
prejudice to the availment of other incentives provided
under other laws
ARMM List 2017 IPP
ARMM List 2017 IPP
The role of private sector investments to
ARMM

The role of private sector investments to lift

the ARMM from poverty cannot be over
emphasized and the fiscal and non-fiscal
incentives for investors administered by the
Regional Board of Investments (RBOI) will
still be needed for the foreseeable future in
order to attract massive private investments
in the region.
ARMM IPP Process 2017 IPP
 The 2017-2019 ARMM Investment Priorities Plan
(IPP) is formulated based on the updated
Philippine Development Plan (PDP) 2017-2019
and ARMM Regional Development Plan.

 As mandated under EO 458, devolving the

powers and functions of BOI to the ARMM
Regional Government, the Regional Board of
Investments (RBOI) is the agency responsible in
identifying priority activities to be registered and
administered in this IPP for projects locating in
the ARMM.
ARMM IPP Process 2017 IPP
 The process of the RBOI in the formulation of the 2017-
2019 ARMM IPP involves a series of consultation sessions
with the public and private sectors and civil society and
evaluating the potential contribution of these identified
economic activities and industries to create quality jobs,
move up the value chain, diversify the region’s agri-fishery
base, generate “spillover effects,” and engender a more
competitive environment.

 The economic activities listed in the ARMM List will be

entitled to fiscal and non-fiscal incentives under Executive
Order No. 226 otherwise known as the Omnibus
Investments Code of 1987, as amended, provided they qualify
with certain criteria and fulfill the terms and conditions of
registration with RBOI.
ARMM List 2017 IPP
Export Activities

1. Export Trader and Service Exporters

2. Support Activities for Exporters
ARMM List 2017 IPP
Agriculture, Agribusiness, Aquaculture And
Fishery

1. Agriculture and Agribusiness

2. Aquaculture and Fishery
ARMM List 2017 IPP
Agriculture and Agribusiness
This covers all types of agricultural production,
farming, plantation, processing or
manufacturing, as long as, the land or the
agricultural production, plantation,
processing or manufacturing is based in
ARMM. It includes value-chain, value-adding,
logistical and supply chain agribusiness
activities based in or involving ARMM
agricultural products or the farmers of the
region, such as silo storage and drying
facilities.
ARMM List 2017 IPP
Aquaculture and Fishery

This covers the aquamarine industry; inland

water resources; seaweeds; fishing; fish
pond including other marine, inland and
brackish water farming, such as abalone
farms, shrimp farming or crab fattening;
the establishment of hatcheries or
breeding of fingerlings and processing of
such marine and inland water resources.
ARMM List 2017 IPP
Basic Industries
This covers the production of pharmaceuticals such
as antibiotics; traditional or herbal medicines and
related activities such as bio-prospecting; textile
or garments; water supply and treatment; ice
plant or refrigeration; traditional craft like boat
building; production of inorganic and organic
fertilizer; all types of heavy industries, such as the
steel industry, petrochemical industry, ship-
building, ship breaking, ship repair and servicing;
dredging for industrial purposes and landfill;
cement production and concrete aggregates.
ARMM List 2017 IPP
Infrastructure and Services
This covers strategic infrastructure projects such as
railways, bridges, tollways, flood control and
support industries like sand and gravel, batching
plant and pre-mixing of cements; air, land and
water transportation; telecommunications to
include the construction and operation of
international gateway facilities both satellite-linked
or linked by terrestrial and submarine cables for
internet connectivity, so long as these are based
in ARMM and are holding ARMM franchise, or
servicing ARMM areas including to and from
ARMM in order to increase inter-connectivity and
support regional or national integration.
ARMM List 2017 IPP
Industrial Service Facilities
This covers industrial centers or industrial estates
to include testing and quality control laboratories;
manpower training and demonstration centers;
vocational and technical skills services and
facilities; call centers and Information Technology
related enterprises such as business process
outsourcing; tool and dye shops and similar
facilities; metal casting and metal working;
furniture and fixtures; ceramics and tile-making;
petrochemical complex and industrial gases.
ARMM List 2017 IPP
Engineering Industries
This covers engineering products;
electronics and telecommunication
products; and fabrication of construction
materials including pre-fabricated
construction materials using new
technologies (e.g. 3D printing) or
indigenously sourced materials.
ARMM List 2017 IPP
Logistics
This covers the logistics, supply chain and logistics
network industry; shipping, hauling and trucking;
cargo shippers and forwarders; bulk carrier;
warehousing and depots; storage; and other
logistics facilities principally based in ARMM
including trans shipment hubs and services using
ARMM ports, airports or located near its special
economic zones. This also contemplates the ports
industry and allied industry in the ARMM and
ancillary services, such as arrastre and
stevedoring, because the ARMM needs to attract
more port industry players.
ARMM List 2017 IPP
BIMP – EAGA Related Investment Enterprises
This covers enterprises using the BIMP-EAGA
framework on trade and investments and who
are located or have their base of operations in
the BIMP-EAGA namely, Brunei; Sabah and
Sarawak in Malaysia; Maluku, Sulawesi, Kalimantan
and Irian Jaya in Indonesia; and Mindanao and
Palawan in the Philippines, who shall invest and
engage in economic activity in the ARMM
including traditional cross-border trade and the
age-old barter trading to encourage the
formalization of peripheral shadow economies.
ARMM List 2017 IPP
Tourism
This covers the establishment of tourism-
related facilities and attractions; tourism-
related services; hotel and restaurants
catering to ARMM tourists; Halal-based
tourism; tourist accommodation facilities;
tourist transport facilities and
development of retirement villages, which
shall include health or medical facilities
and other amenities.
ARMM List 2017 IPP
Health and Education Services and Facilities
The ARMM has some of the lowest indicators in the
country regarding health and education as
reflected in the Human Development Index. For
this purpose, there is a need for incentives to be
given to investors in the health and educational
sectors such as putting-up of private hospitals,
medical clinics, wellness centers, primary
education, secondary education, tertiary
education (colleges, universities and vocational-
technical schools) and ancillary or support
services such as teacher training centers.
ARMM List 2017 IPP
HALAL Industry
The 2004-2010 MTPDP envisioned that ARMM shall
be the production and processing center for the
Halal industry. ARMM being the only Muslim
region in the country has a comparative
advantage in the Halal industry since majority of
Halal consumers are in the region. Any Halal
related business enterprises that obtain the
necessary Halal certification or is operating under
Islamic (Shariah) law principles shall be covered.
Halal refers to the permissible products and
services under Islamic Law.
ARMM List 2017 IPP
Banking, Non-bank Financial Institutions and Facilities
Aside from conventional banking and finance,
microfinance and cooperative financing, this includes
Islamic banking and finance; and Islamic microfinance
and pawnshop operations, since the ARMM is the
most unbanked region in the country and there is a
need for financial inclusivity in accordance with the
provisions of the Organic Act (Sec. 7, Art. IX, R.A. No.
9054). This also includes remittance centers to cater
to remittances of Overseas Filipino Workers.
Guidelines for this purpose may be issued by the
RBOI after consultation with the relevant
stakeholders and institutions engaged in financial
access and financial inclusivity programs and activities.
ARMM List 2017 IPP
Energy
More energy investments are needed in the ARMM considering
that the household electrification rate in the ARMM is the
most dismal in the country with only 34% as compared with
the national rate of 74%. This covers energy investments in
upstream and downstream industries such as power
generation, transmission and distribution. Off-grid and Small
Power Utilities Group or SPUG areas shall be prioritized for
investments and giving of incentives considering that these
are stranded markets for electricity. It covers not only energy
but also ancillary services and in the context of ARMM, this
means the construction of substations and transmission and
distribution towers considering that there are also frequent
power outages due to disruption of such facilities from man-
made and natural disaster causes.
2017 INVESTMENT
PRIORITIES PLAN
A Presentation

THANK YOU!